Question

	Tomatoes (Y)	Onions (X)
A	15	0
B	14	1
C	12	2
D	9	3
E	5	4
F	0	5

If you specialize in tomatoes how many bushels can you produce?

What is the opportunity cost in terms of tomatoes to produce one more bushel of onions when moving from point E to F?

What trend is there in marginal cost when proceeding from point A to point F?

What causes this trend?

What is the shape of the curve?

Why does it have that shape?

If there was a severe drought, what do you think would happen to the curve?

If a new fertilizer were developed that increased yield per acre by 22% what would happen to the curve?

10. What type of economic growth is this?

11. If trees were cleared to create more usable acreage what type of economic growth would occur?

  

Answer 1

If there is a specialisation in tomatoes then ,the person produce 15 bushels of tomatoes and no onion.

Opportunity cost of producing one more onion in terms of tomatoes from point E to F is equal to (5-0) = 5 tomatoes. Because to increase the production of onion by 1 bushel , producer will produce 5 less of tomatoes.

Opportunity cost from point A to F goes on increasing.

This is because of for every increase in the production of onion there is more decrease in the production of tomatoes.So, the opportunity cost from each successive unit goes on increasing.

The shape of the curve is concave.

This is because of the increasing opportunity cost.

If there was a severe drought then the PPC curve shift inward.

If a new fertilizer were developed then PPC curve shift outward. This is the potential growth.